EPA Proposes Lower Renewable Fuels Requirement

Earlier Friday, the Environmental Protection Agency (EPA) announced the 2014 Renewable Fuel Standard volume requirements. The proposed rule released by the EPA lowers the required consumption of conventional renewable fuel to 13.01 billion gallons, despite the law mandating consumption of 14.4 billion gallons, and below the 2013 level of 13.8 billion gallons. It also provides that biodiesel remains at 1.28 billion gallons; EPA has also proposed to reduce the total advanced biofuels requirement, which also limits the opportunities for biodiesel.

The proposed rules will be open for public comment, with a 60 day limit, prior to being made final in the spring of 2014.

In a press release on Friday, The Minnesota Corn Growers Association (MCGA) revealed its extreme disappointment in the Environmental Protection Agency’s (EPA) proposal to lower ethanol blending goals for 2014 set in the Renewable Fuels Standard (RFS).

The RFS is reducing our dependence on foreign oil and lowering prices at the pump. In other words, said MCGA President Ryan Buck, it’s working exactly as it was intended and there is no need to change it.

“By calling for a reduction in the amount of ethanol we blend with gasoline, EPA is sending a message that America is not committed to developing a domestically produced renewable energy source that is a viable alternative to foreign oil,” Buck said.

“The RFS finally provided long overdue competition for the oil industry in the transportation fuels market. Now is not the time to cave into Big Oil’s demands and limit choices at the pump. Today’s proposal will increase record profits enjoyed by oil companies while squeezing consumers.”

Today’s proposed rule cuts 1.4 billion gallons from the conventional ethanol cap that was set in statute at 14.4 billion gallons. Corn prices are falling and projections show that farmers are harvesting the largest crop in American history. A cut to the RFS will have serious repercussions throughout the entire economy – especially in rural areas that rely on agriculture. It also sends the wrong message to consumers who are demanding a less expensive and cleaner alternative to foreign oil.

The Iowa Corn Growers Association shared similar sentiment, with ICGA President Roger Zylstra making the following comments:

"This is a critical time for farmers to engage on this issue. Unfortunately, so far, Washington D.C. is failing our famrers with pressure from Big Oil by lowering the conventional ethanol requiprements to 13.01 billion gallons," said Zylstra. "The Iowa Corn Growers Association is extremely concerned about the impacts to the corn industry because of this cap."

The American Soybean Association also expressed its disappointment in the new proposed requirements.

“The level set forth in the proposal is unnecessarily low and will stifle the growth and job creation potential demonstrated by the biodiesel industry over the past several years,” said Danny Murphy, a soybean, corn and wheat farmer from Canton, Miss., and ASA’s president. “Biodiesel, including biodiesel produced from soybean oil, is the most prevalent advanced biofuel currently produced in the United States. Biodiesel is the first and only EPA-designated Advanced Biofuel to reach 1 billion gallons of annual production. The industry has met or exceeded the RFS Biomass-based Diesel volume requirements each year they have been in place.”

ASA will continue to work with EPA and industry partners to demonstrate the flaws represented by this proposal and looks forward to achieving a final rule that does not hinder the momentum and positive economic benefits generated by biodiesel.

“The biodiesel industry is on track to produce at least 1.7 billion gallons of biodiesel in 2013, and can match or surpass that production level in 2014,” added Murphy. “By keeping the RVO target at the lower 1.28 billion gallon level, EPA would be limiting an industry that is supporting jobs, providing a valuable market for soybean farmers, and in turn lowering the price for the protein-rich soybean meal used in animal feed.”

As Murphy points out, processing biodiesel from soybeans uses only the oil portion of the soybean, leaving all of the soy meal protein available for livestock feed and consumer food products. By providing a market for soybean oil, biodiesel increases the availability of protein-rich meal, and the increased meal supply results in a more cost-effective food and feed source. “As we move forward, ASA will be working with industry stakeholders as well as with EPA during the public comment period to demonstrate to the agency the merit and benefits of setting the biomass-based diesel RVO at a level in the final rule that is not below the amount produced in 2013.”

Zylstra reminds farmers and producers that this is still a proposed rule, which means farmers still have time to influence the outcome."We are asking the Administration, on behalf of Iowa's corn farmers, to change the proposed rule that decreases ethanol use. We want to maintain the current levels in the RFS that we have worked so hard to achieve."

Gov. Terry E. Branstad and Lt. Gov. Kim Reynolds vowed to join agricultural groups, family farmers and all Iowans in fighting for renewable fuels in light of the misguided and dumbfounding decision by the Environmental Protection Agency (EPA) to lower the volumes of renewable fuels utilized on America's streets and highways.

"Why the Obama administration would side with the big oil companies over Iowa's homegrown renewable fuels is baffling," said Branstad. "The EPA has turned its back on rural America, and our economy and family farms will suffer as a result. Corn prices have already dropped to the cost of production, and this will likely further squeeze corn producers and negatively impact income growth in rural America. We have more than 50 ethanol and biodiesel plants in Iowa, and these EPA reductions would negatively impact thousands of Iowa jobs. This debate isn't over. I will lock arms with our agricultural groups, our family farmers, leaders from both parties, and Iowans in fighting for Iowa's homegrown, reliable, and safe renewable fuels. I encourage Iowans to officially comment to the EPA."

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